Here's how Trump plans to use national security law to replace struck tariffs

The Trump administration is planning to use Section 232 of the Trade Expansion Act of 1962 to replace the global tariffs struck down by the Supreme Court of the United States (SCOTUS) last week, as per a Bloomberg report.

To this end, officials are planning a number of additional national security investigations that would enable US President Donald Trump to impose these new tariffs, it added.

What is Section 232 of the 1962 Trade Expansion Act?

• Section 232 of the 1962 Trade Expansion Act deals with protecting "National Security". It allows tariffs on imports deemed a "national security" threat, separate from the International Emergency Economic Powers Act (IEEPA) of 1977.
• It empowers the US president to “adjust the imports” of an article where the US Department of Commerce Secretary finds that imports threaten to impair national security, again following an investigation and report.
• Section 232 has no 15% cap on tariffs and no 150-day expiration date. However, its implementations precede an investigation, a report of which must be submitted within nine months (270 days).
• The President then has 90 days to decide whether to use their statutory authority. If the President acts, they have 15 days to implement the measure (usually via a Presidential Proclamation).
• Congressional approval is not required for the President to impose tariffs or quotas under Section 232. Congress is only entitled to a written statement from the President within 30 days explaining why the action was taken.
• There is only one category where Congress has a "veto" over Section 232 actions: Petroleum (oil). This means Congress can override presidential actions if the President uses Section 232 to adjust oil, petroleum or petroleum product imports.

What are the investigations planned?

The administration is preparing plans to launch investigations into the impact of imports on batteries, cast iron and iron fittings, electrical grid equipment, telecom equipment, plastics and plastic piping, and industrial chemicals, according to a person familiar with the plans granted anonymity to detail internal deliberations.

The probes under Section 232 of the Trade Expansion Act of 1962 were first reported by the Wall Street Journal (WSJ); the provision allows the president to impose levies based on national security concerns.

Section 122 tariffs to be replaced too?

Any new tariffs would come as Trump has already moved to impose a global tariff in the wake of the Supreme Court decision. The administration announced that a 10% levy would be imposed beginning Tuesday morning, which Trump subsequently threatened to increase to 15%.

The president can likely only keep those tariffs in place for five months, and Trump indicated he’d use that time to prepare other import taxes that could help, in aggregate, replace the levies struck down by the courts. Tariffs justified by Section 232 authority are seen as more legally viable, and the president has already used the legal provision to place levies on metals and autos during his second term.

What is Donald Trump's strategy?

US Trade Representative Jamieson Greer said last week Trump would also look to initiate probes under Section 301 of the Trade Act of 1974 — which is designed to counter discriminatory actions by trading partners — as he sought to rebuild his tariff program.

Those inquires are expected to cover “most major trading partners” and include “areas of concern such as industrial excess capacity, forced labor, pharmaceutical pricing practices, discrimination against U.S. technology companies and digital goods and services, digital services taxes, ocean pollution, and practices related to the trade in seafood, rice, and other products,” Greer said in a statement. The investigations are expected to conclude on an “accelerated” timeline.

Trump sends warning: Don't ‘play games’

Earlier Monday, Trump threatened higher tariffs on goods from countries that “play games” with their existing US trade agreements following the Supreme Court’s decision quashing his global duties.

“Any Country that wants to ‘play games’ with the ridiculous supreme court decision, especially those that have ‘Ripped Off’ the U.S.A. for years, and even decades, will be met with a much higher Tariff, and worse, than that which they just recently agreed to. BUYER BEWARE!!!” Trump posted Monday on social media.

The administration has sought to move quickly on the replacement tariffs in a bid to keep deals intact with US trading partners in the wake of the court’s ruling, which undercut his ability to set tariff rates using an emergency law.

Are countries looking for ways out of deals?

The European Union on Monday froze the ratification process for its agreement with the Trump administration. Officials in the European Parliament said they want to seek clarity on Trump’s tariff program before moving forward.

China, Japan, South Korea and the UK are among other major trading partners that negotiated trade pacts with the US. The White House did not immediately respond when asked if Trump’s post was aimed specifically at the EU.

Trump’s post is the latest sign he’s digging in on his plan to unilaterally impose broad tariffs on products entering the US market. But after the court’s decision, he has less flexibility to do so.

“As President, I do not have to go back to Congress to get approval of Tariffs,” Trump wrote in a subsequent post.

(With inputs from Bloomberg)